A contemporary investigation of causality between the primary government budget deficit and the ex ante real long term interest rate in the US

Richard Cebula ()

BNL Quarterly Review, 2002, vol. 55, issue 223, 417-435

Abstract: Using error-correction model (ECM) estimation, this study empirically examines, for theUS, the causality relationship between the federal government budget deficitand the ex ante real long term interest rate. The system includes personal federal income tax rates, the M2 money supply, the unemployment rate, an ex ante realshort term interest rate and net international capital inflows. To clarify thedeficit/interest rate relationship, the budget deficit is measured by the primarydeficit, which excludes net interest payments by the Treasury. The ECM estimates in this study provide results that suggest a bi-directional relationship between theprimary budget deficit and the ex ante real long term interest rate yield.

Keywords: Budget; Deficit; Interest Rates; Interest; Money Supply; Money; Supply; Tax (search for similar items in EconPapers)
JEL-codes: E43 E62 H62 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9917/9799 (application/pdf)

Related works:
Journal Article: A contemporary investigation of causality between the primary government budget deficit and the ex ante real long term interest rate in the US (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:psl:bnlaqr:2002:44

Ordering information: This journal article can be ordered from
http://www.economiacivile.it

Access Statistics for this article

BNL Quarterly Review is currently edited by Alessandro Roncaglia

More articles in BNL Quarterly Review from Banca Nazionale del Lavoro
Bibliographic data for series maintained by Carlo D'Ippoliti ().